Ipanema [2006] QBCCMCmr 738 (20 September 2006)

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

I hereby order as follows –

1. that Moonlight Group Pty Ltd, owner of Lot 2 in the scheme, shall keep no items in the car park space on common property over which it has exclusive use, other than a car, and shall remove all other items stored in that car-park space within 14 days of the date of this order, failing which the body corporate may enter into the enclosed car-park space to remove such items for safe-keeping elsewhere at the expense of Moonlight Group Pty Ltd if necessary;
2. that Moonlight Group Pty Ltd shall pay to the body corporate within 14 days of the date of this order, the sum of $1,815 being the sum of $1,650 plus GST of $165 for the cost of dismantling an exhaust duct, as ordered by interim order of an Adjudicator on 17^th July 2006;
3. that Moonlight Group Pty Ltd may within one month of the date of this order propose motions to the Secretary for the body corporate, to keep a canopy, a sign in the foyer, and a fence around its car-parking space, as referred to in the Reasons hereto, and any other motions in respect of the dining facility, as it wishes, which motions are to be put to a general meeting of the body corporate and decided by special resolution in accordance with section 113 of the Body Corporate and Community Management (Accommodation Module) Regulation 1997 ;
4. that if Moonlight Group Pty Ltd do not propose such motions within one month of the date of this order, or if the motions to maintain the canopy, the sign and the fence or any of them are not passed at the general meeting, then Moonlight Group Pty Ltd must remove the canopy, the sign and the fence and make good any common property damaged by their removal within one month of the failure to propose the motion(s) or within one month of the general meeting wherein the motion(s) are not passed, at its own expense, failing which the body corporate may remove such items and make good the common property and seek reimbursement for the works from Moonlight Group Pty Ltd;
5. Notification that this order has been made shall be given to all lot owners within 21 days of the date of this order, and a copy of it shall be made available to any lot owner on request, at the cost of the body corporate.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0471-2006

"Ipanema" CTS 32267

APPLICATION

This is an application dated 20th June 2006 by the body corporate for Ipanema Community Titles Scheme 32267 (the body corporate) for an order against Moonlight Group Pty Ltd, (Moonlight) the owner of Lot 2 in the scheme, for an order that Moonlight removes unauthorised alterations/improvements to the lot and common property and that the property be reinstated to its original state at Moonlight’s expense. The body corporate also seeks removal of a sign which it says has been unlawfully placed by Moonlight, and that items stored in Moonlight’s car parking space are removed. The body corporate claim that three by-laws have been breached by Moonlight.

The body corporate also sought an interim order that an exhaust duct installed by Moonlight, which is part of the unauthorised alterations referred to above, was removed immediately as it is a fire hazard.

On 17^th July 2006, I made an interim order that Moonlight must dismantle the exhaust duct within 7 days and block up any resulting aperture, failing which the body corporate could do the necessary works, and claim the costs of re-securing Moonlight’s premises if necessary, from Moonlight.

JURISDICTION

"Ipanema" CTS 32267 is a community titles scheme governed by the Body Corporate and Community Management Act 1997 (the Act) and the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (Accommodation Module). There are 82 lots in the scheme created under a Building Format Plan of subdivision.

Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about-

(a) a claimed or anticipated contravention of the Act or the community management statement; or

(b) the exercise of rights or powers, or the performance of duties, under the Act or the community management statement; or

(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or

(ii) the authorisation of a person as a letting agent for a community titles scheme.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).

SUBMISSIONS

The body corporate alleges that Moonlight has breached scheme by-laws in three ways: Firstly, by erecting a sign in the foyer without body corporate approval. The sign says "Bar-Restaurant." Moonlight has the exclusive use as the owner of Lot 2 of an area of common property used only as an ancillary dining area on Level C. The by-law breached is by-law 8 which says -

"8. Appearance of Building

The body corporate says the erection of the sign also conflicts with the uses allowed by virtue of By-Law 35.1 which says –

"Ancillary Dining

The second allegation of by-law breach is of By-law 38 which concerns exclusive use car-parking. The body corporate say that Moonlight is using its parking area for storage, and the body corporate has provided photographs showing a wired off or caged area containing packing cases, or cardboard lined shelves inside from floor to ceiling. The body corporate says this is a fire hazard and a health hazard.

By-law 38 says –

The third by-law breach concerns By-law 13 headed " Structural Alterations." The allegations are that Moonlight has made the following alterations without body corporate approval –

The body corporate issued Moonlight with a Notice of Continuing Contravention of By-Law (Form BCCM 10) on 5^th June 2006 giving Moonlight 14 days to cease all contraventions. The breach notice stated that the body corporate had reasonable grounds to believe that Moonlight was contravening By-law 8 (Appearance of building), By-law 13 (Structural Alterations) and By-law 38 (Exclusive Use- Carparking).

The breach notice followed letters dated 27^th March 2006 and 6^th April 2006 from the body corporate pointing out the breaches and asking Moonlight to remove the ducting and the items in storage, within 7 days. The letter of 27^th March stated that Moonlight was in breach of by-law 7 "Depositing of rubbish on common property."

The combination of the installation of the exhaust duct and the storage of many articles in the car-parking area together created or contributed to a fire hazard. If there was a fire in the car-park amongst the inflammable material stored there, the exhaust fan might have drawn up flames into the upper floors.

It was because of the fire hazard that I approved the removal of the exhaust ducting on 17^th July 2006.

Further submissions with regard to the final orders sought were invited from Moonlight. There has been no response from Moonlight.

On 25^th July 2006 this Office received a submission from committee member John Mackinnon who is deeply concerned about the insurance implications for public liability if the sign, the canopy, or the stored items fell on any person. He says that the Bar/Restaurant sign is misleading as there has never been a bar in the restaurant area, and it must confuse guests.

DETERMINATION

I am not advised when the sign, the canopy, and the exhaust duct were erected, nor when Moonlight erected a fence around the carpark area, or commenced storage of material in the space. Since Moonlight has however chosen not to respond, there is no argument before me that the body corporate either allowed, encouraged or acquiesced in any of these alterations.

Nor is it argued that there is any contract between the body corporate and Moonlight, the terms of which allow such alterations to be made or structures to be erected.

I am satisfied that Moonlight is aware of the body corporate’s concerns about breaches of by-law, and has chosen to ignore the body corporate’s correspondence, the contravention notice, and communications from this Office.

I sought further information about the sign and the canopy from the body corporate which provided photographs and a plan on 15^th September 2006.

The Bar/Restaurant sign
By-law 8 is clear. The erection of any sign on an owner’s lot requires the approval in writing of the Body Corporate Committee if it can be seen from the common property. I note that the sign is not on an owner’s lot, but erected on the common property in the foyer. I also note that the Bar/Restaurant sign consists of words electrically lit and fitted on what appears to be a metal box hung from the ceiling in the foyer, and connected to a power source.

The Canopy
The canopy consists of professionally erected shade cloths stretched in a half moon shape between metal uprights some of which are attached by brackets to a low wall around the swimming pool with further metal uprights attached by brackets to low feature walls along the outside of the building. The roof supports are also metal struts bolted into a facia on the exterior wall of the building. It is a substantial construction attached to and over common property.

Moonlight has exclusive use of the dining area as shown on Plan no. A3:EU:6245 "Plan of Exclusive Use Area A" on Level C which is an area of 129 sq. m. Beyond that area, is the " al fresco" dining area which is on common property over which no exclusive uses are granted.

If the sign and the canopy are improvements to the common property for the benefit of an owner’s lot, they both require the approval of the body corporate and a special resolution in accordance with section 113 Accommodation Module, which states as follows -

(1) The body corporate may, if asked by the owner of a lot, authorise the owner to make an improvement to the common property for the benefit of the owner’s lot.

(b) the improvement does not detract from the appearance of any lot included in, or common property for, the scheme; and

(c) the body corporate is satisfied that use and enjoyment of the authorised improvement is not likely to promote a breach of the owner’s duties as an occupier.

(3) An authorisation may be given under this section on conditions the body corporate considers appropriate.

(b) must maintain the improvement made under the authority in good condition, unless excused by the body corporate.

A "minor improvement" is defined as one that has an installed value of less than $250.

The ancillary dining area is an exclusive use area for the benefit of the owner of Lot 2 , (see By-Law 35.1.) Moonlight should therefore not have erected the canopy without approval of the body corporate by special resolution taken at a general meeting. The foyer is simply common property, but the sign erected there is " for the benefit of an owner’s lot" in that it directs customers to the restaurant area, and the same authorisation should have been sought.

Carpark space fenced in and storage of materials
By-law 38 is clear that the car-parking space available for the exclusive use of Lot 2 is for car-parking only. This wording in similar by-laws has been interpreted by this Office to mean that for example, boats and caravans are not permitted in the car-parking space. Certainly storage of items is not incorporated in the term " car-parking only."

In order to fence in or construct a cage around the car-parking space, which is common property over which Moonlight has exclusive use, the terms of section 113 again come into play. The fencing would be an improvement to the common property for the benefit of an owner’s lot unless the exceptions listed at section 113(2) are met.

Exhaust Ducting
The body corporate says that the duct, which is not part of the original design of the building, has been installed by Moonlight to extract cooking fumes from ovens and burners situated in the Ancillary Dining Area.

The exhaust duct was installed on the south-west wall from the kitchen to the edge of the building. It was not completed and was "blinded off" at the edge of the building. The body corporate was concerned that if there was a fire in the car-park or storage rooms below the duct, flames could be drawn upwards through the ducting. The body corporate says that Moonlight did not seek local authority approval of the installation, and there is no body corporate approval for it.

I found that the duct may be a fire hazard and understand that following the interim order, that the duct has now been removed by the body corporate and the aperture blocked to remove the fire hazard.

Conclusion
The body corporate asks who is to pay for the work done in removing the ducting and restoring the wall to the condition prior to the ducting being fitted. The work cost the body corporate $1,650 excluding GST and it has decided to forward this invoice to Moonlight without further order.

The body corporate also seeks reinstatement of the common property to "its original state", by which I believe it means to a state prior to the improvements made by Moonlight, at Moonlight’s expense.

I am not satisfied that the erection of the sign is a breach of By-law 8. I am satisfied that the storage of items in the car-park space is a breach of By-law 38.

I am not entirely satisfied that the installation of ducting, the erection of the canopy, and the erection of a fence around the car park space are in fact breaches of By-law 13, because they are not structural improvements to an owner’s lot, but concern common property over which Moonlight has exclusive use by virtue of being the owner of Lot 2, and fall into the requirements of section 113 as set out above. I am satisfied however, that Moonlight is aware of the committee’s request to remove the sign, the canopy, the exhaust duct, the fencing round the car-park space, and the items stored in the car parking space.

I find it difficult to believe that both the Bar/Restaurant sign and the canopy were erected without the knowledge, co-operation or acquiescence of the body corporate. However, Moonlight has not sought to make a submission on these matters.

I consider that the canopy especially appears to be something which could be an asset to the body corporate, and that to order its removal, without more, might be a short-sighted step. Since these are improvements which should have been put to a general meeting, the members of the body corporate have the right to decide by special resolution, if they wish to allow the canopy, the sign and the car park fence.

Moonlight has one month from the date of this order to propose motions, for the keeping of the canopy, the sign in the foyer, the fenced-in car-parking space, and any other matters with regard to signage at the dining facility or in respect of it, as it wishes. The body corporate may attach such conditions as it considers reasonable if these items, or any of them, are to be allowed, in accordance with section 113(3) Accommodation Module. These items may not be removed until either one month has passed without Moonlight submitting such motions to the secretary of the scheme, or until a body corporate general meeting has been held at which Moonlight’s motions have been put and not been passed.

If the canopy, the sign and the fence, or any of them, are to be removed, they shall be removed by Moonlight, or failing Moonlight, by the body corporate at Moonlight’s expense, and remedial work such as filling screw and bolt holes and repainting surfaces shall also be undertaken by Moonlight, or failing Moonlight, by the body corporate at Moonlight’s expense. Moonlight is to remove the items within one month of the decision being made, either by Moonlight’s failure to submit such motions in one month from the date of this order, or within one month of the decision not to allow the items or any of them, by the body corporate at a general meeting.

Moonlight shall remove all items stored in the car-park space within 14 days. Since I am satisfied that these stored items constitute a safety issue, in that they could be a fire hazard or insurance liability, I further order that if Moonlight does not remove all items from the car-parking space, then the body corporate may thereafter enter into the car-park space using cutting equipment if necessary, in order to remove such items, provided that all care is taken of Moonlight’s goods and they are stored safely somewhere else, if necessary at a professional storage facility at Moonlight’s cost. I also advise Moonlight that if it does not remove the stored items from the car-parking space in the due time period, it is a failure to comply with an Adjudicator’s order for which the fine may be up to $30,000 in a Magistrates Court. ( section 288 Act).

I further order that Moonlight shall pay to the body corporate the sum of $1,815 being the sum of $1,650 plus GST of $165 for the cost of dismantling the exhaust duct, within 14 days of the date of this order.

Since in this application, no submissions have been sought from lot owners, I further order that the fact that this order has been made concerning the future of the sign in the foyer, the canopy and the fenced car-park, be made known to lot owners by the most economical means which the Committee can devise, and that lot owners be invited to have a copy of the order sent to them promptly on request. Notification shall be given to owners within 21 days of this order. The cost of dissemination of the notice and copies of the order as requested, shall be borne by the body corporate.

Number of Scheme:	32267
Name of Scheme:	Ipanema
Address of Scheme:	2865 Gold Coast Highway SURFERS PARADISE QLD 4217

a)	enclosed the car parking space referred to above;
b)	affixed a canopy to common property over the al fresco dining area;
c)	allowed the affixed canopy to extend over the exclusive use area enjoyed by Lot 2 onto the common property;
d)	installed exhaust ducting on the south-west wall from the kitchen to the edge of the building

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Ipanema [2006] QBCCMCmr 738 (20 September 2006)